especially to non-residents

Incorrect notification to taxpayers by the tax authorities

21 / Apr

In case of a purchase or sale by notarial deed, we recommend citizens, especially non-residents, to designate a tax representative in Spain in the deed. This allows them to be notified in a timely manner of any incident regarding the tax aspects of the transaction.

To explain about the various tax agencies (Agencias Tributarias) in Spain, we have to refer to Article 46 of the Spanish General Tax Law (Ley General Tributaria), as well as various rulings that establish jurisprudence. The aforementioned article states:

Taxpayers with capacity to act may act through a representative, who may be a tax advisor, with whom successive administrative actions will be carried out,  unless expressly stated otherwise.

For filing appeals or claims, withdrawing them, waiving rights, entering into or acknowledging obligations on behalf of the taxpayer, requesting refunds of undue income or reimbursements, and in the other cases where the signature of the taxpayer is required in the procedures regulated in Titles III, IV, V, VI and VII of this law, the representation must be accredited by any legally valid means that leaves a reliable record or by means of a declaration in personal appearance of the interested party before the competent administrative body.

However, the tax authorities notify the citizen illegally and without further formalities through the edictal route! The edictal notification is the one in which the tax authority issues a notification in the relevant Official State Journals when the place where the interested party should be informed is unknown or, after trying to inform the interested party, has not succeeded.

We must bring to your attention that our public tax authorities usually do the notification in the most inconvenient way for the citizen. We emphasise here on the non-resident citizen, because he usually receives the notification at his second home , a place where he is usually not present for the whole year.

There have even been cases in which the Tax Agency has limited itself to notifying the taxpayer only at the address that was provided when obtaining the NIE number; addresses where the taxpayer will almost certainly not be found. In this way, the taxpayer is “caught in the act”, which can ultimately lead to the seizure of his Spanish bank account or home, having been notified by edicts. However, this is a method of notification that can only be used in exceptional cases when there is no other possible way of notifying the taxpayer.

Case law has emerged against this outrage to citizens, in particular in the Supreme Court judgment, Contentious Chamber, 3926/2011 of 5 May. This states that the jurisprudence on faulty notifications in the field of judicial proceedings is extensive and that, based on the Spanish Constitution, this jurisprudence also applies to public procedures. The Supreme Court’s doctrine on procedural acts performed by judicial bodies should apply in exactly the same way to notifications of acts and decisions performed by public authorities.

In other words, if the Supreme Court requires the courts to try to notify citizens at all possible addresses that may be known to them and should use all possible tools to find the taxpayer, the same diligence should be required of the tax authorities for the same reason.

Despite what the law and jurisprudence indicate, the Tax Agency continues to make incorrect notifications. Therefore, non-residents should appoint a tax representative who not only represents them in tax obligations but also makes his address available for any notifications. It is likely that the Tax Agency will ignore the law and case law, but ultimately it will be easier to win a court case if the tax representative is explicitly designated at the time of the transaction based on Article 46 of the Ley General Tributaria (LGT). In this way, judges will be more certain to rule in favour of citizens.

Maria Dolores García Santos